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Wednesday, November 3, 2010

SECTOR UPDATE

Banking: Neutral

Sep '10 statistics: No surprisesMaintain Neutral. System loans uptrend continued, on track to meet our 12% loan growth forecast for 2010 (YTD: +9.1%). Property loans made up 46.2% of the system's loan growth YTD, and Bank Negara is expected to meet with the banks next week on the loan-to-value ratio for 3rd residential properties. Other system indicators continued to be well. No change to our forecasts, target prices and calls.

Technicals

The FBM KLCI rose slightly higher by 4.0 points yesterday to end at 1,509.66. Its resistance areas at 1,511 and 1,524 may cap market gains, whilst its support areas are located at 1,495 and 1,509.

Trading idea for today is a SHORT TERM BUY call on SMISCOR.

Other Local News

Axiata: Launches new roaming rate plan. Axiata, via its subsidiaries, has launched 'Axiata Roam', an initiative which will see roaming rates significantly slashed in some countries where Axiata has operations. Under the plan, Axiata's customers travelling abroad will only pay local rates for calls home when travelling within Axiata's network of mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia without worrying about the roaming rates. This promotion will be valid for four months until end-February next year. (Source: The Star)

KFC: Buys more assets from JCorp. KFC Holdings Bhd (KFC), via its wholly owned Ayamas Food Corp Sdn BHd, has proposed to acquire four poultry broiler farms from companies under Johor Corp (JCorp) for RM1.1m. All the four farms started operations only last year and are still loss making. The acquisition will not have any material impact on the current year earnings. In the past 12 months, the related party transactions between JCorp and KFC amounted to RM30.8m with the biggest item being purchase of KPJ Reit Bhd shares by KFC (RM20.9m). (Source: The Edge Financial Daily)

KLK: To further increase plantation land in Indonesia. Kuala Lumpur Kepong Bhd (KLK) is acquiring 95% of the issued and paid-up capital in PT Anugerah Surya Mandiri (PT ASM) for RM4.7m. PT ASM currently holds a certificate for about 3,700 ha in Indonesia, which it intends to develop into oil palm plantations in due course. (Source: The Edge Financial Daily)

MAS: Gets first B737-800. Malaysia Airlines Bhd (MAS) yesterday received its first B737-800, the latest generation aircraft which promises both economy and business-class passengers a better travel experience. MAS will be the first full-service airline in the world to operate B737-800 with the new Boeing Skyline Interior. The national carrier had placed an order for 55 such aircraft with Boeing and would take delivery of three more by the year-end. (Source: The Star)

Construction: Penang bridge, airport projects on schedule. The ongoing second Penang bridge project and the expansion of the Penang International Airport are progressing smoothly and on schedule. The bridge project which is now 34% completed and scheduled for completion in November 2013, costs RM4.5b. Jambatan Kedua Sdn Bhd (JKSB) is the concessionaire of the project. The first phase of the airport expansion, which is slated for completion in January 2012, costs RM250m. It is managed by Malaysia Airports Holdings Bhd. (Source: Business Times)

Consumer: Seafood export to Russia likely to resume soon. Malaysia's export of seafood products to Russia is expected to resume by the year-end. Matrade said that the current ban will be revoked and will expedite the process of resuming Malaysian seafood exports to Russia. Among Asean exporters, Malaysia is ranked fourth after Vietnam, Thailand and Indonesia in respect of seafood exports to Russia, amounting to RM2.1m in 2009. (Source: Business Times)